Reassuringly expensive

Getting poor students to university costs more than money

WHEN Parliament voted almost to treble to £9,000 the maximum annual tuition fee that can be charged students at English universities from September 2012, coalition ministers had three aims. The first was to help fill the alarming hole in the nation's finances by slashing the sums spent on higher education; it was embraced most strongly by the Conservatives. The second was to create a market in university education, again popular with the right. The third, championed by the Liberal Democrats, was to get more students from poor families into university, despite the initially daunting higher fees. It is the final aim that now looks most likely to be realised.

As the government also plans to cut the money it provides universities to teach students, some 130 English institutions of higher education intend to increase their tuition fees; their governing bodies have until April 19th to say by how much. Three universities—Cambridge, Imperial College London and Exeter—have already announced that they will charge top whack, and Oxford hints that it will have to do the same if it is to fund bursaries for students from poor families. When the maximum fee was last raised, in 2006, almost all universities soon charged the top rate. Raising the cap again, and by so much, was supposed to let them set differential fees that reflected the quality of the education they provided, as well as encouraging potential students to assess whether they offered value for money. Instead it appears that prices will cluster at the upper extreme.

Part of the problem is perception: price is seen as a proxy for quality. Universities do not want to seem cheap because students might suspect that a low tuition fee signals a second-rate product. But higher education is also genuinely expensive. The average cost of teaching an undergraduate is £7,500. Some universities want to offer their students a better education than they do now, and must charge more to cover the cost of delivering it. Others anticipate the loss of specific income streams—from, for example, government plans to shift teacher training into schools.

And more costs attached to raising the attainment and aspiration of schoolchildren will now fall to universities. On March 8th the Office for Fair Access, a quango established to cajole universities into accepting students from poor families, said that any of them charging more than £6,000 a year would have to spend some of the surplus on improving access. That will push fees higher too.

This eliminates price as a market force in high education and also adds to the state's bill, for government pays the fees until a student graduates and earns an annual salary above £21,000. To limit the damage, David Willetts, the universities minister, has threatened vice-chancellors with further funding cuts should the average tuition fee turn out higher than £7,500. This is the sum the government assumed in devising a system of financial support for students it thought it could afford.

But Mr Willetts lacks the means to implement his threat in a way that would target the institutions he thinks are raising their fees too much. From September 2012 the state will give teaching grants only for science, technology, engineering and medicine: all subjects that the government wants to encourage. Mr Willetts could reduce university research grants, but that too would fail to curb mediocre institutions' tuition-fee ambitions, for research is concentrated in the elite ones. And it will be years before new providers of higher education, which he plans to encourage, exert discipline on the old-timers.

The Lib Dems, meanwhile, can pull levers to ensure the outcome they are keenest on because the Office for Fair Access can fine institutions that fail to attract students from poor families. The latest global ranking of universities published on March 10th by Times Higher Education, a magazine, puts 11 English universities in the top 100 (Edinburgh University also features). All but one of those—Sheffield—have a smaller proportion of state-school full-time undergraduates than might be expected, given the number of state-school students across the country who meet their exam-grade entry criteria (see chart).

One big reason is that even clever state-school students (not all of whom, of course, are poor) often do not apply to top universities, as a study by the Sutton Trust, a charity, has found. So the Office of Fair Access wants universities to seek them out more diligently. Those that charge more than £6,000 a year will have to set—and meet—formal targets for enrolling more poor students, on pain of losing the right to charge those fees. Interestingly, the quango thinks universities would do better to spend less on bursaries for poor students and more on outreach to raise their ambition and achievement.